The visible crisis of the international workers’ movement has been seized upon by propagandists of the bourgeoisie to proclaim a new golden age of capitalism. But despite the enormous growth of poverty, the bourgeoisie has been unable to extricate itself from the deepening world crisis of the entire capitalist order. The crisis which confronts the bourgeoisie on a world scale is of a historic and systemic, and not simply conjunctural, character.

The fall in the rate of profit in the 1970s and the general economic stagnation provided the impulse for an explosive growth in the activity of transnational corporations. The result has been an unprecedented integration of the world market and internationalization of production. The absolute and active predominance of the world economy over all national economies, including that of the United States, is a basic fact of modern life. Advances in technology associated with the invention and perfection of the integrated circuit have produced revolutionary changes in communications which, in turn, have accelerated the process of global economic integration. But these economic and technological developments, far from opening up new historical vistas for capitalism, have raised the fundamental contradiction between world economy and the capitalist nation-state system, and between social production and private ownership, to an unprecedented level of intensity.

The phenomena of massive transnational corporations and the globalization of production are inextricably linked with another factor which has profoundly revolutionary implications: the loss by the United States of its global economic hegemony, in both relative and absolute terms. This historic change in the world position of US imperialism, expressed in the transformation of the United States from the world’s principal creditor into its largest debtor, is the underlying cause of the dramatic decline in workers’ living standards and must lead to a period of revolutionary class confrontations in the US.

A third factor, manifesting the irrevocable breakdown of the entire economic and geopolitical framework of the postwar reconstruction of world capitalism under the hegemony of the United States, is the rise of Japan as the most potent industrial power and the largest exporter of capital. It challenges American capitalism in every corner of the globe. The conflict between the United States and Japan is the most explosive, but by no means the only, expression of steadily worsening inter-imperialist antagonisms. The old “Atlantic Alliance” of the postwar era is breaking down completely as the European bourgeoisie strives to transform the Economic Community (EC) into a trade and financial bloc capable of challenging both Japanese and American capital. This is the significance of the plans to establish a single European market by 1992.

A fourth factor of great revolutionary significance is the extraordinarily rapid development of the economies of the Asian Pacific Rim, which has brought into existence large working classes that are being thrust into struggle against the native bourgeoisie, whose economic position is entirely dependent on unsustainable export markets. The movement of the working class in South Korea signifies the entrance of young but powerful detachments of the industrial proletariat throughout Asia into the arena of world revolution. Moreover, it is not in Asia alone that the export of capital by imperialism has given rise to these new battalions of the working class. The same process is well advanced in Africa and Latin America (especially Mexico).

The fifth factor to which we draw attention is the impoverishment of the backward countries and the collapse of all the myriad “development” strategies of the impotent national bourgeoisie. The countries of Latin America, Africa and the Indian subcontinent, while by no means identical in terms of their industrial and general economic development, are all social powder kegs. There is no escape from the suffering and degradation produced by imperialism and the policies of its national bourgeois henchmen except through socialist revolution.

Finally, a sixth factor, to which we have already made reference, is the revolutionary consequences which must flow from the turn by all ruling Stalinist bureaucracies in the Soviet Union, Eastern Europe and China to the policies of the market economy. In China there is a revival of forms of poverty not seen in more than 35 years as a consequence of the Stalinist bureaucracy’s encouragement of capitalist relations in the city and countryside. Inflation and unemployment are already making their impact felt. As the recent strikes in Poland have demonstrated, the workers in the Stalinist-ruled countries will not peacefully accept the reintroduction of capitalism.